Yes, we all know that Cambridgeville is an expensive place to buy. But word on the streets is that the real estate market is cooling, so is that helpful to buyers here? Good question.
Earlier this spring, I ran the data (link to post here) and prices were up over last year. Also, having been out there with all my buyers this spring/summer, things felt just as competitive as ever, and some of the prices I was seeing were WAY over what I’d have expected based on 2018 sales. Interestingly, though, when I ran another analysis in MLS yesterday, the data was telling a different story.
Now, we all know data can be made to support whatever argument one wants to make. And I will also say that given our low housing inventory and therefore lack of a critical mass of sales data, none of this may be statistically meaningful. Still, it’s interesting to examine the numbers, so let’s do it…
Here’s a breakdown of the average sale prices (rounded to nearest thousand) to date in 2019 for a few sample home-buying scenarios, compared to 2018:
Say you want to buy a condo with 1 bedroom, 1 bath, and no parking…
In Cambridge this year, it would cost you $549,000 — this is actually down a bit compared to same period last year where the average price was $564,000
In Somerville, you’d spend $472,000 this year, compared to $538,000 last year
As I said, this data is based on a small number of sales, particularly in Somerville, where there are very few one bedroom units. But let’s go with the lower prices for a minute and consider a hypothetical *why.* Typically, one bedroom units are appealing not only to first time buyers, but also investors, many of whom have historically been international. From what I’ve read, foreign investment in US real estate is down by as much as a third this year. So that could certainly affect prices for this type of property.
So maybe you’d like that condo with 2 bedrooms, 1 bath and 1 parking space…
In Cambridge this year, it would cost you $711,000 — again, this is down a bit from the average of $728,000 during the same timeframe last year
In Somerville, it would be $658,000 — in this case, up from the same period last year where these units averaged $599,000
Want a condo with 3 beds, at least a bath and a half and at least one parking space?
In Cambridge this year, it would cost you $1,472,000 — this is fair increase over the same period last year when these homes were averaging $1,408,000. It’s interesting that while the smaller, less expensive condo prices went down this year, these went up — and I can tell you from experience working with several buyer clients in this category that my real world experience is 100 percent in line with the data and in fact, I felt like the increases were even higher. For example, I know of a few condos with these specs that would have sold last year in the range of around $1.3M that this year went for $1.5 – $1.7.
In Somerville, a similar condo cost $1,008,000 this year, compared to $974,000 last year. And I was actually surprised not to see the numbers flat for this category, since there was so much overbuilding of larger units last year, and a glut of places sitting on the market as of the beginning of the year. I still stand by my assertion that if you want a deal, and are open to Winter Hill and East Somerville, these types of units can be had for a great price right now.
Finally, if a single-family is more your thing…
In Cambridge homes up to 2000 SF average $1,104,000 so far this year, compared to $1,161,000 in 2018 (so down a bit), while those larger than 2000 SF are going for $3,134,000 in 2019, way up from $2,527,000 last year.
In Somerville, a smaller single cost an average of $811,000 this year, up from $750,000 in 2018, while larger homes averaged $1,283,000, up a bit from last year’s price of $1,226,000. I do find that reality bears this out — seems more and more folks are looking for singles in Somerville and willing to pay higher and higher prices to get them.
So I am walking away from this data dive without a clear picture of what’s going on in the market. As I said, when I’m out there with buyers, things seem as crazy as ever. But I have found that a few of my listings this year got fewer offers than I would have expected, so I guess that bears the data out. Will be interesting to see how we do in the fall, which has in recent years been a bit of a softer market than the spring/summer, particularly in Somerville (not so much in Cambridge).
Stay tuned for an end-of-year update!